BMW Settles FTC Charges Over Warranty Rules

(CN) – BMW of North America agreed to settle charges that its MINI division violated federal law by telling consumers their warranties would be void unless they used MINI parts and MINI dealers to perform maintenance and repair work, the Federal Trade Commission announced. In its administrative complaint, the FTC alleged BMW, through its MINI division, violated a provision of the Magnuson-Moss Warranty Act by requiring consumers to use specific brands of parts or specified service centers. “It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car,” explained Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. The proposed order settling the FTC’s complaint prohibits BMW from telling consumers that to ensure their vehicle’s safe operation that must patronize only MINI dealers or MINI centers unless the automaker can substantiate these statements with reliable scientific evidence. The proposed settlement also requires the automaker to inform MINI owners of their right to use third-party parts and service without voiding warranty coverage, unless BMW provides such parts or services for free. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning March, 19, 2015, and continuing through April 20, 2015, after which the Commission will decide whether to issue the order on a final basis. Interested parties can submit written comments electronically.